A budget for billionaires, not battlers

Posted by Andrew Leigh Mp48sc on May 23, 2014

Today, the politics and business e-newsletter, Inside Canberra, published by latest opinion piece on the Federal Budget:

Whether you ask parents, pensioners or conservative premiers, it’s pretty clear that the Coalition’s first budget is deeply unpopular. Part of the reason for this is that it breaks promises faster than a child snapping up kindling. So much for no cuts to health, no cuts to education, no cuts to pensions, no cuts to the ABC, and no new taxes. Broken too are the pledge not to cut more than 12,000 public servants, and the promise not to make further cuts to foreign aid. It now appears that when Mr Abbott was sermonising about the need for politicians to keep their word, he wasn’t talking about himself.

The other reason people are angry about the budget is that it doesn’t reduce the deficit. Let’s put aside the nonsense suggestion that we should compare Mr Hockey’s 2014 budget with his 2013 budget update. The only sensible comparison is with the Pre-Election Economic and Fiscal Outlook, independently prepared by the secretaries of Treasury and Finance during the caretaker period. Measured against that benchmark, this budget has a higher deficit this year, next year, and across the forwards. By international standards, Australian deficits are relatively small, but they are bigger now than when the government came to office.

But the main reason this budget has sent shivers through the community is that it fails the fair go test. As the news sinks in, people are asking themselves: how will the budget make my life harder?

A single parent recently contacted me. She’s worked hard all her life, supporting herself and her two boys, and was to be made redundant this year. As the redundancy date loomed closer she did her best to secure another job in order to guard against unemployment and to avoid disadvantaging her two boys who rely on her income. But she struggled: “I went for interview after interview.” No one was willing to give her a go. “Our government is much the same,” she reflected, “they look after those who are capable and successful and they leave the rest behind.”

An aged pensioner got in touch. She told me about her life of contribution to this nation, her four working children, and even her six grandchildren. Throughout her life she did her best, paying her taxes and raising a family. Rather than now being in a position to enjoy her days, the woman explained how she feels like a burden on society. “I am one of those pensioners whose sole income is the pension, no superannuation payments, nothing. I feel sad, depressed, and scared for my ability to pay my way when all the cuts start.” In 2014, no pensioner should have to fear for their future, just so the government can afford to give $50,000 to millionaire families when they have a child.

Perhaps most disturbingly was hearing the story of a single mother who had left her marriage due to domestic abuse while pregnant with her second child. She works hard, but doesn’t earn much. The Abbott Government’s welfare cuts will squeeze her household budget tighter, but this isn’t why she was distressed. She pointed out that during her separation she relied on legal channels to ensure her and her unborn child were protected from her abusive partner. She is now shattered to have read the Abbott Government’s plan to reduce funding to community legal aid. “I firmly believe in protecting our right to live safely, to protect our most vulnerable, it is absolutely what we as Australians should be doing…..don’t take away a mother’s right to protect her children.” She fears that woman like her who find themselves in these horrific circumstances will now have more difficulty in seeking the legal assistance to help escape these nightmares.

Perhaps the reason that this budget has angered so many Australians is that it comes after a generation of rising inequality, when earnings have risen three times as fast for the top tenth as for the bottom tenth. Australia is more unequal today than it has been for three-quarters of a century. There could not be a worse time to deliver a budget that helps billionaires at the expense of battlers.

This piece was published by Inside Canberra on Friday the 23rd of May 2014.